The Bethany Care Foundation. Financial Statements March 31, 2014

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1 The Bethany Care Foundation Financial Statements

June 16, 2014 Independent Auditor s Report To the Board of Directors of The Bethany Care Foundation We have audited the accompanying financial statements of The Bethany Care Foundation, which

2 June 16, 2014 Independent Auditor s Report To the Board of Directors of The Bethany Care Foundation We have audited the accompanying financial statements of The Bethany Care Foundation, which comprise the statements of financial position as at and 2013 and opening balances as at April 1, 2011, and the statements of operations and changes in fund balances, and cash flows for the year ended and March 31, 2013, and the related notes including a summary of significant accounting policies. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. PricewaterhouseCoopers LLP Avenue SW, Suite 3100, Calgary, Alberta, Canada T2P 5L3 T: , F: PwC refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

3 We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of The Bethany Care Foundation as at and March 31, 2013 and April 1, 2011 and the results of its operations and its cash flows for the year ended and March 31, 2013 in accordance with Canadian generally accepted accounting principles. Chartered Accountants

4 Statement of Financial Position As at Assets Unrestricted Restricted Fund Fund Total Total Current assets Cash , ,663 Accounts receivable and prepaid expenses 8,989-8,989 8, , , ,185 Long-term investments (note 3) - 10,691,316 10,691,316 9,780,894 Other long-term assets 1,717-1,717 1,465 Liabilities 365,033 10,691,316 11,056,349 9,930,544 Current liabilities Accounts payable and accrued liabilities 26,537-26,537 42,752 Due to Bethany Care Society (note 4) 220, , ,294 Due (from) to other funds (341,224) 341, (94,665) 341, , ,046 Fund balances Unrestricted net assets 459, , ,930 Restricted funds (note 5) - 10,350,092 10,350,092 9,274, ,698 10,350,092 10,809,790 9,635,498 Commitments (note 5) 365,033 10, ,056,349 9,930,544 App dhythef3ot?4jjj Directors Director Director

5 Statement of Operations and Changes in Fund Balances For the year ended Unrestricted Fund Restricted Funds Total Total Revenue Fundraising (note 6) Grants and donations 158, , , ,145 Special and third party events 3,822 44,887 48, , , , , ,470 Investment income 1,650,998-1,650,998 1,049,346 Increase in value of life insurance ,464 1,813, ,886 2,167,385 1,629,280 Expenses Fundraising direct costs 133,424 1, , ,197 Fundraising indirect costs 174, , ,787 Special and third party events expenses 3,822 1,002 4,824 28,780 Administration costs 120, , ,798 Investment management and other professional fees 56,338-56,338 48, ,422 2, , ,389 Excess of revenue over expenses before contributions for Society priorities 1,325, ,641 1,676,718 1,184,891 Contributions to Bethany Care Society (26,309) (476,117) (502,426) (498,207) Excess (deficiency) of revenue over expenses 1,298,768 (124,476) 1,174, ,684 Fund balances Beginning of year 360,930 9,274,568 9,635,498 8,948,814 Appropriations and transfers (note 5) (1,200,000) 1,200, Fund balance End of year 459,698 10,350,092 10,809,790 9,635,498

6 Statement of Cash Flows For the year ended Cash provided by (used in) Operating activities Excess of revenue over expenses 1,174, ,684 Items not affecting cash Realized gain on sales of investments (322,405) (194,492) Increase in fair value of investments (837,574) (484,930) Donations of marketable securities (8,723) (5,743) Increase in value of life insurance (252) (1,464) Net change in non-cash working capital items (16,682) 6,931 (11,344) 6,986 Investing activities Purchase of investments (482,388) (364,070) Proceeds on sales of investments 740, , , ,041 Financing activities Due to Bethany Care Society (32,272) (73,780) Net increase in cash 214, ,247 Cash Beginning of year 139,663 32,416 Cash End of year 354, ,663

7 Notes to Financial Statements 1 Description of the Organization The Bethany Care Foundation (the Foundation ) is a not-for-profit organization which was incorporated under the Companies Act (Alberta) on July 15, 2003 and registered as a charity under the Income Tax Act (Canada) on September 8, The Foundation carries out fund-raising activities which support the priorities of Bethany Care Society (the Society, see note 4). The Foundation also manages the endowed funds and other restricted funds held in trust for the Society. 2 Significant accounting policies The financial statements of the Foundation have been prepared in accordance with Part III of the CICA Handbook. These accounting standards for not-for-profit organizations require management to make assumptions and estimates that affect the reported amount of assets, liabilities, revenues and expenses. Actual amounts could differ from those estimates. Fund accounting The Foundation follows the restricted fund method of accounting for contributions. Activities of the Foundation are segregated into the following funds: Unrestricted fund This fund reflects the Foundation s administrative activities, fund development activities (including the receipt of all unrestricted donations as well as those restricted donations for which no restricted fund exists), investment management activities, and the management of other assets (resources) consumed in the process of raising funds. Restricted funds This fund reflects any activity related to the receipt of externally restricted contributions and the expenditures of both externally and internally restricted resources, as directed by third party contributors or the Foundation s Board of Directors, respectively. Included in the restricted funds are endowments, the original contributed amounts of which must be maintained in perpetuity by the Foundation. The income generated from the endowments is available annually to the Foundation for its general use. Restricted fund balances Internally restricted fund balances represent funds restricted by the Foundation s Board of Directors for use in specific programs or projects of the Society. Externally restricted fund balances represent funds endowed or otherwise restricted by outside parties for use in specific programs or projects of the Society. (1)

8 Notes to Financial Statements Revenue recognition All restricted contributions are recognized as revenue in the appropriate restricted fund when received or, if no restricted fund exists, they are recognized in the unrestricted fund using the deferral method of accounting for contributions. Unrestricted contributions are recognized as revenue of the unrestricted fund in the year received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Investment income comprises interest, dividends, fund distributions, and gains (losses) realized on the disposal of investments and the change in fair value of investments. Interest and dividends earned on investments, other than those investments managed on behalf of the Society, are included as revenue in the unrestricted fund on the accrual basis. Donations Donations in kind Donations in kind are recorded at estimated fair value at the time of contribution to the extent that fair value can be reasonably estimated. During the year ended, donations in kind of 6,247 (2013 6,928) were recognized as donation revenue with the corresponding expense also recorded in the appropriate fund. In addition, donations of marketable securities of 8,723 (2013 5,743) were received and included in donation revenue of the appropriate fund. Cash surrender value of life insurance The Foundation has received gifts of policies of life insurance. Insurance premiums paid by the donor to maintain the policies in good standing are recognized as donation revenue with a corresponding life insurance premium expense. The cash surrender value is recorded as an asset and included in other longterm assets. As the realizable amount in excess of the cash surrender value is not certain, the Foundation will record the benefits as donation revenue when the proceeds are certain. Volunteers Each year, volunteers contribute a considerable number of hours which support either fundraising for the Foundation or the delivery of programs within the Society. Due to the difficulty of determining or otherwise estimating these hours and the fact that these services are not otherwise purchased, contributed services are not quantified and recognized in these financial statements. Investments Investments are made in accordance with the Foundation s investment policy statement which identifies investment objectives and asset allocation parameters. (2)

9 Notes to Financial Statements Long-term investments are recorded at market value. Long-term investments may consist of segregated or pooled fund investments in equities, corporate and government bonds, treasury bills and money market investments, all of which are recorded at market value. Transactions related to the purchase or sale of investments are recorded at the settlement date. Inter-fund balances Inter-fund balances are non-interest bearing and carry no fixed repayment terms. 3 Long-term investments The Foundation s long-term investments are comprised of the following: Money market investments 426, ,638 Canadian bonds 3,742,208 3,679,018 Equity investments Canadian 2,382,585 2,912,456 U.S. 1,889,916 1,316,344 International 2,250,131 1,483,438 Total long-term investments 10,691,316 9,780,894 4 Bethany Care Society The Foundation is considered a controlled foundation of the Society as the Society is the beneficial owner of all of the Foundation s issued shares. The Society provides continuing care, shelter and lifestyle services to seniors and persons with disabilities. The Society operates seven care centres in Calgary, Airdrie, Cochrane, Didsbury, Red Deer and Sylvan Lake, its housing facilities at Riverview Village, Sundance on the Green and Bethany House, and properties it manages Bethany Village, Lions Village and the Town of High River s affordable housing units on behalf of their owners. A significant portion of the Foundation s operating costs are paid for by the Society and reimbursed by the Foundation. As a result, cash transfers are made on an ongoing basis between the Foundation and the Society to meet the operating requirements of each organization. As at, included in the Foundation s statement of financial position is an amount of 220,022 ( ,294) due to the Society by the Foundation. This amount is unsecured, non-interest bearing and has no fixed repayment terms. Other than the reimbursement of operating costs, all significant transactions and balances between the Foundation and the Society are disclosed separately in these financial statements. (3)

10 Notes to Financial Statements The Foundation manages investments in the amount of 2,707,046 (2013 2,870,287) on behalf of the Society. These managed funds consist of amounts owned by the Society and managed for investment purposes by the Foundation on behalf of the Society. 5 Restricted funds A summary of the Foundation s restricted funds is as follows: Balance 2013 Net fundraising revenue Contributions to Bethany Care Society Interfund transfer Balance 2014 Internally restricted funds Pastoral Care 1,854,158 - (184,750) - 1,669,408 Palliative Care 606, ,393 Therapies 340, ,120 Seniors Health Research 34, ,281 Staff Education 83, ,000 Bethany Care Society Projects 5,153,460 - (22,262) 1,180,000 6,311,198 8,071,412 - (207,012) 1,180,000 9,044,400 Externally restricted funds Programs 34, ,385 (104,500) - 88,244 Equipment 58,467 - (32,595) (25,872) - Special Projects 708, ,235 (132,010) 45, , , ,620 (269,105) 20, ,251 8,873, ,620 (476,117) 1,200,000 9,945,651 Endowment funds 401,420 3, ,441 9,274, ,641 (476,117) 1,200,000 10,350,092 For the year ended, the Board of Directors elected to transfer 1,200,000 ( ,000) of unrestricted funds to internally restricted funds and to transfer 20,000 (2013 nil) from internally restricted funds to the R. Greer Black Legacy Fund, a fund that was established to recognize the significant contributions of the retired President and Chief Executive Officer of the Society. Contributions of 476,117 ( ,079) from restricted funds and 26,309 ( ,128) from the unrestricted fund were approved by the Board of Directors and provided to the Society during the 2014 fiscal year. Included in investment income of 1,650,998 (2013 1,049,346) is an amount of 10,228 ( ,318) that was generated from the above endowment funds. Future commitments The Board of Directors has approved grants to the Society, in the amount of 660,000, to support operating program expenses and capital expenditures budgeted for the Society s 2015 fiscal year. (4)

11 Notes to Financial Statements 6 Fund-raising a) Government grants The following government grants were received during the year: Provincial government Community Initiatives Program, granted in support of the Society s Music Therapy Program 17,000 - Alberta Culture and Community Spirit, granted in support of the Society s Music Therapy Program - 25,000 Alberta Culture and Community Spirit, granted in support of a new therapeutic bath tub and bathroom renovations at Bethany Calgary 22,008 - Federal government New Horizons for Seniors, granted in support of the creation of resident gardens at Bethany Collegeside 25,000 - b) Fund-raising expenses The Foundation is registered under the Charitable Fund-raising Act (Alberta), and is in compliance with Section 7(2) of the Charitable Fund-raising Regulation (Alberta), which requires disclosure of the following amounts: 2014 Amounts paid as remuneration to employees whose principal duties involve fund-raising 270, ,067 Total expenses incurred for the purposes of soliciting contributions 314, , (5)

12 Notes to Financial Statements 7 Financial instruments The Foundation s financial instruments recognized in the statement of financial position consist of cash, accounts receivable, long-term investments (net of managed funds), cash surrender value of life insurance (included in other long-term assets), accounts payable and accrued liabilities and due to Bethany Care Society. The fair values of these financial instruments, excluding long-term investments and the cash surrender value of life insurance, approximate their carrying amounts due to their short-term maturity. Long-term investments and the cash surrender value of life insurance are recorded at fair value. The Foundation is subject to fluctuations in market prices of stocks and bonds, interest rates, exchange rates and credit risks on bonds. These risks are mitigated by the Foundation s investment policies, which prescribe the asset mix of investments, including constraints by asset class and eligibility requirements. (6)

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